Amazon.com Inc and Whole Foods Market are up to a surgical strike in the already savage grocery price war.
On Wednesday, Whole Foods launched a much-awaited loyalty program that provides exclusive discounts to the Prime customers, including a discount of 10 percent off on hundreds of items on sale and weekly specials in a rotation. These advantages are available currently in Florida and will spread out to the remaining stores beginning this summer. Amazon earlier made an announcement regarding the free two-hour delivery to its Prime members from Whole Foods stores and its subscription club with video streaming and fast shipping.
Co-founder and Chief Executive of Whole Foods, John Mackey told Reuters, “This brand new loyalty strategy will put into test whether Amazon’s $13.7 billion deal with Whole Foods accompanies an intensified price war and disturbance to the U.S. grocery industry of $800 billion which is dominated by Kroger Co and Walmart Inc. With a total of 463 stores in the U.S. and roughly 1% share of the separated U.S. grocery market, Whole Foods had gained strength since the last summer when it merged with Amazon.”
Mackey said, since the merger, the number of items bought per transaction, keenly watched size of the basket has grown, but he refused to give any specifics. Mackey is confident about Prime convincing the shoppers regarding their doubts about its “Whole Paycheck” reputation which is a reasonable option for their many purchases. These newly initiated perks to gain customer attraction has the potential to make Whole Foods more affordable than ordinary, regular grocers for a population of about 8 million of its consumers who already are subscribers of Amazon Prime, according to the analysts of Morgan Stanley. Prime members can give in their cell numbers or scan an app to receive the discounts at the checkout.
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